2025 Valid NCREC-Broker-N FREE EXAM DUMPS QUESTIONS & ANSWERS
Free NCREC-Broker-N Exam Braindumps North Carolina Real Estate Commission Pratice Exam
NEW QUESTION # 22
Which of the following BEST describes a seller's market?
- A. Sellers often receive multiple offers on their property.
- B. There are more sellers than buyers.
- C. Buyers have more negotiating power.
- D. Home prices are generally falling.
Answer: A
Explanation:
A "seller's market" occurs whendemand exceeds supply, resulting in strong buyer competition. The most common real-world effect ismultiple offers on listed properties, intensifying competition and giving sellers leverage. This matches optionB. The definitions in NCREC study guides, textbooks, and appraisal resources all align with this scenario.
NEW QUESTION # 23
A salaried employee of a North Carolina brokerage firm that practices property management must have a real estate license if they perform which task?
- A. Completing a preprinted lease contract
- B. Showing apartment units to prospective tenants
- C. Negotiating the amount of a security deposit
- D. Accepting applications for a lease
Answer: C
Explanation:
In North Carolina, salaried employees working under a licensed brokerage or property management firm may engage in certain administrative or ministerial tasks without a real estate license-such as showing rental units, collecting rent, and accepting applications. However, negotiating lease terms or the amount of a security deposit involves brokerage-level activity and requires a real estate license. Therefore, the correct answer is C.
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NEW QUESTION # 24
A North Carolina broker has been designated as the broker-in-charge (BIC) at a brokerage firm. This means that the broker:
- A. must supervise all provisional brokers in the office.
- B. can supervise both the main office and one or more branch offices.
- C. must be the owner of the brokerage firm.
- D. can appoint a second BIC to help in the office.
Answer: A
Explanation:
In North Carolina, theBroker#In#Charge (BIC)is responsible for supervisingall provisional brokersand ensuring they adhere to Commission rules. While a BIC may also supervise branch offices if appointed, the core statutory duty is direct supervision of licensed provisional brokers . Therefore,Option Dis the most accurate.
NEW QUESTION # 25
Which statement about a mortgagee's title insurance policy is TRUE?
- A. It protects the lender against defects in the title.
- B. The amount paid on a claim equals the original loan amount.
- C. Coverage never expires as long as the buyer owns the property.
- D. The policy premium is usually added to the monthly mortgage amount.
Answer: A
Explanation:
A mortgagee's (lender's) title insurance policy protects the lender from financial loss caused by title defects that were not discovered before the mortgage was issued. The policy coverage lasts until the loan is repaid.
The borrower pays a one-time premium at closing-it is not part of the monthly mortgage. Claims are based on the unpaid balance of the loan, not necessarily the full loan amount. Therefore, the correct answer is D.
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NEW QUESTION # 26
If a seller whose property is currently listed with another company initiates a conversation with a broker about the possibility of the broker becoming their new listing agent, the broker:
- A. may discuss the terms of a possible listing agreement that would begin after the current listing ends.
- B. may not discuss the terms of any possible future listing agreement.
- C. must advise the seller to contact an attorney.
- D. may suggest that the seller terminate the current listing agreement early.
Answer: A
Explanation:
Under the NCREC Rules and Code of Ethics, a broker may not interfere with another firm's existing exclusive listing agreement. However, if a seller independently initiates a conversation, a broker is allowed to discuss the terms of a future agreement - but that agreement must begin only after the current listing expires.
The broker must not suggest early termination or breach of contract. Therefore, option A accurately reflects what is legally and ethically permissible.
NEW QUESTION # 27
Which situation would be an appropriate use of an expedited eviction process in North Carolina?
- A. A tenant has been arrested on a charge of domestic violence.
- B. A tenant has filed a false complaint with a local housing authority.
- C. A residential tenant has not paid the rent in more than two months.
- D. A tenant in a two-week vacation rental has breached the rental agreement.
Answer: D
Explanation:
Under NC General Statutes Chapter 42A (Vacation Rental Act), a landlord may employ theexpedited eviction process(using magistrate and four-hour notice) when a tenant under a vacation rental agreement (30 days or fewer) breaches the contract-such as overstaying, failing to pay rent, or materially violating terms. A two-week vacation rental falls under this provisionsog.unc.edufairhousingnc.org+14ncleg.gov+14nclamp.
gov+14fairhousingnc.org. Option A is standard eviction, not expedited; B and C don't qualify under expedited procedures.
NEW QUESTION # 28
Which statement about the presence of mold in a home is TRUE?
- A. Mold can grow in any area under any conditions.
- B. All mold is toxic.
- C. Mold is most commonly found in areas with high moisture.
- D. Mold is listed as a hazard on the Residential Property and Owners' Association Disclosure Statement.
Answer: C
Explanation:
Mold requires moisture to grow and is most commonly found in damp environments such as basements, bathrooms, and areas with water damage. Not all mold is toxic, and the presence of mold is not specifically listed on the NC Residential Property and Owners' Association Disclosure Statement (though it may be disclosed as a material fact). Therefore, the correct answer is D.
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NEW QUESTION # 29
A prospective buyer, who just moved to town from Venezuela, asks their buyer agent to show them houses only in Latino neighborhoods. If the buyer agent complies with the buyer's directions, the agent could be guilty of:
- A. pandering
- B. redlining
- C. blockbusting
- D. steering
Answer: D
Explanation:
Steering is the illegal practice of guiding prospective buyers toward or away from certain neighborhoods based on race, ethnicity, religion, or other protected characteristics. Even if the request comes from the buyer, complying with such directions violates the Fair Housing Act. The correct answer is D - steering.
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NEW QUESTION # 30
After taking a listing on a property, a broker learns of major highway changes in the area. The broker should disclose this information:
- A. as a material fact to all transactional parties.
- B. to the buyer but only if the buyer asks about it.
- C. as a material fact to all transactional parties but only if the changes will be completed within a year.
- D. to the buyer but only if the seller agrees to the disclosure.
Answer: A
Explanation:
North Carolina brokers are obligated to disclose all material facts to all parties in a transaction, regardless of representation. Planned infrastructure changes such as highway expansions may affect property value or desirability and are therefore material facts. The duty to disclose is not conditional on the buyer's inquiry or seller's permission. So the correct answer is C.
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NEW QUESTION # 31
The owner of a cooperative unit has which of the following rights in the property?
- A. A proprietary lease for the exclusive use of the unit and shares of stock in the corporation that owns the property
- B. A fee simple interest in the unit and an undivided common interest in common areas
- C. A fee simple interest in the unit and a proportional interest in common areas based on unit size
- D. A fee simple interest in the unit combined with occupancy rights for a specified recurring period annually
Answer: A
Explanation:
In a cooperative (co-op) ownership arrangement, the real estate is owned by a corporation. Individual residents do not own their units as real property. Instead, they own shares of stock in the corporation and receive a proprietary lease, which gives them the right to occupy a specific unit. This contrasts with condominium ownership, where unit owners hold fee simple title. Therefore, the correct answer is D.
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NEW QUESTION # 32
Bernie is the broker-in-charge at a brokerage firm located in North Carolina. He is actively involved in listing and selling properties. Mei is a provisional broker at the same brokerage firm. She has a buyer client who has expressed interest in one of Bernie's listings. In this transaction, what would be a permissible agency arrangement?
- A. Bernie and Mei each have a single agency relationship with their respective clients.
- B. Bernie and Mei would be designated agents of their respective clients.
- C. Bernie would be the designated agent for both buyer and seller.
- D. Bernie and Mei could act as dual agents to both clients.
Answer: B
Explanation:
Under North Carolina agency rules,dual agencyis permissible only ifwritten informed consentis secured from both parties, and typically involvesdesignated agencyto avoid conflict of interest. Bernie could serve as thedesignated agentfor the seller (listing), and Mei could serve as thedesignated agentfor the buyer, each separately representing their client while the brokerage acts as dual agent at the firm level Option C accurately reflects this legal structure. Option A (non-designated dual agency) is rarely allowed, B leaves Bernie unrepresented for seller, and D improperly places one agent on both sides.
NEW QUESTION # 33
Which statement about a North Carolina broker-in-charge (BIC) is TRUE?
- A. A broker-in-charge can serve in that capacity in multiple brokerage offices at different locations.
- B. To qualify for BIC Eligible status, a broker must complete a 24-hour course offered by the Real Estate Commission.
- C. To qualify for BIC Eligible status, a broker must have three years of full-time brokerage experience in the previous five years.
- D. A brokerage office can designate only one broker-in-charge.
Answer: C
Explanation:
To qualify for Broker-in-Charge Eligible status in North Carolina, a broker must have at least three years of full-time brokerage experience (or equivalent part-time experience) within the past five years. Additionally, they must complete the 12-hour Broker-in-Charge Course. Option B is incorrect due to the course length (not
24 hours), and option D is incorrect because a broker-in-charge can only manage one physical office location.
Option C is incorrect as branch offices may also have a separate BIC. Therefore, A is the correct answer.
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NEW QUESTION # 34
In North Carolina, which lien has the highest priority when property is sold to recover a debt?
- A. Whichever lien was recorded first
- B. Mortgage lien
- C. Ad valorem property tax lien
- D. Judgment lien
Answer: C
Explanation:
In North Carolina, and in most states, ad valorem (real estate) property tax liens have "superior lien" status.
They take precedence over all other liens, regardless of recording date. This includes mortgage liens and judgment liens. Therefore, even if a mortgage was recorded first, a property tax lien takes priority. Correct answer: A.
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NEW QUESTION # 35
If a buyer defaults on a purchase agreement just prior to settlement, what clause in the contract would likely allow the seller to keep the earnest money deposit?
- A. Punitive damages
- B. Liquidated damages
- C. Actual damages
- D. Compensatory damages
Answer: B
Explanation:
Liquidated damages refer to a pre-agreed amount of compensation (often the earnest money deposit) that one party is entitled to retain in the event the other party breaches the contract. In North Carolina, the standard Offer to Purchase and Contract includes provisions stating that if a buyer breaches after due diligence, the seller may retain the earnest money as liquidated damages. Therefore, the correct answer is C.
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NEW QUESTION # 36
Which of the following will an appraiser consider when appraising a property?
- A. A reconciliation of values if more than one appraisal method is used
- B. The cost to update the subject property
- C. The original price paid for the property
- D. The average value of all available comparables
Answer: A
Explanation:
When using more than one approach to value (sales comparison, cost, and income), an appraiser must reconcile the results, weighting each method based on its relevance to the subject property. The original purchase price and average of all comps are not directly used in determining value. The cost to update may factor into adjustments but is not a primary valuation method. Therefore, the correct answer is D.
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NEW QUESTION # 37
In North Carolina, if a listing broker is tempted to disclose the terms of an offer to get another buyer to submit a higher offer, what must the broker do?
- A. Disclose all offers to all competing buyers because the existence of multiple offers is a material fact
- B. Obtain permission to disclose the terms of the offer from the seller only
- C. Obtain express authority to disclose the terms of the offer from the offering party
- D. Only disclose the highest or best offer
Answer: C
Explanation:
In North Carolina, a broker may not disclose the price or terms of one buyer's offer to another party without the express permission of the party who made the offer. This ensures fair dealing and prevents misuse of confidential offer terms. While a seller can instruct a broker to disclose that there are multiple offers, the details (like price, due diligence fee, etc.) require written consent from the offeror. Therefore, the correct answer is B.
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NEW QUESTION # 38
What duty does a North Carolina real estate broker have related to material facts?
- A. An affirmative duty to discover and disclose material facts to their clients only
- B. A duty to disclose known material facts to their clients only but no affirmative duty to discover material facts
- C. A duty to disclose known material facts to all parties but no affirmative duty to discover material facts
- D. An affirmative duty to discover and disclose material facts to all parties
Answer: D
Explanation:
NC brokers are bound by an affirmative duty to both discover and disclose material facts to all parties in a transaction, not just their clients. This includes facts they know or should reasonably know, such as structural defects, zoning violations, or environmental issues. This duty exists regardless of whom the broker represents.
Therefore, option A is correct.
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NEW QUESTION # 39
A listing broker receives a signed offer from a buyer. Although the broker must present the offer to the seller as soon as possible, under the North Carolina Real Estate Commission Rules, the broker must present the offer:
- A. within 2 days.
- B. within 3 days.
- C. within 24 hours.
- D. before the end of the next business day.
Answer: D
Explanation:
NCREC rules require brokers to present all written offers to their client "immediately, but in no event later than three days." However, standard practice and Commission guidance emphasize that brokers must present offers no later than the end of the next business day after receipt. This ensures timely communication and allows the seller to respond promptly, especially in a competitive market. Therefore, the correct answer is B.
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NEW QUESTION # 40
A property owner owns 150 acres of land. Bordering one side of the property is a non-navigable river. Which statement about the owner's ownership rights is TRUE?
- A. The owner's land ownership rights extend to the center of the river.
- B. The owner owns the water and can build a dam to restrict its flow.
- C. The owner can stop other people from using the river.
- D. The owner has littoral, not riparian rights.
Answer: A
Explanation:
In North Carolina, if a property borders a non-navigable river or stream, the property owner holds riparian rights. This means the owner's property extends to the centerline of the watercourse. Littoral rights, by contrast, apply to properties bordering large, navigable bodies of water such as oceans and lakes. The owner does not own the water and cannot restrict its natural flow or public use where applicable. Therefore, the correct answer is C.
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NEW QUESTION # 41
A Baptist charity runs a not-for-profit senior housing community for members of its faith. A 75-year-old Hindu woman applies to lease an apartment, and her application is denied. Does she have a case for illegal discrimination under the federal Fair Housing Act?
- A. Yes, this is illegal because it involves religious discrimination.
- B. No, this is legal because religious organizations can restrict tenancy based on religion only.
- C. No, this is legal because the Fair Housing Act does not address religious discrimination.
- D. Yes, this is illegal because there are no exemptions for protected classes.
Answer: B
Explanation:
Under the federal Fair Housing Act, religious organizations may limit occupancy of their non-profit housing to persons of the same religion, provided the property is not operated commercially and there is no discrimination based on race, color, or national origin. Thus, option D is correct - the charity may lawfully restrict tenancy to members of its own faith.
NEW QUESTION # 42
A North Carolina non-provisional broker at ABC Realty has been working with a buyer client to help them purchase a house listed by XYZ Realty. After the transaction closes, who will pay the non-provisional broker the commission they earned?
- A. The qualifying broker of XYZ Realty
- B. The supervising broker-in-charge at ABC Realty
- C. The seller
- D. The buyer client
Answer: B
Explanation:
In North Carolina, only a broker-in-charge (BIC) or firm can receive compensation directly for brokerage services. All brokers, whether provisional or not, must be paid through their affiliated BIC or firm. In this case, the buyer agent is affiliated with ABC Realty, so the firm or its BIC receives the compensation- typically from XYZ Realty's firm via the co-brokerage agreement-and then disburses the earned commission to the broker. Therefore, the correct answer is D.
NEW QUESTION # 43
A seller lists his home with a brokerage firm, allowing the brokerage to put a sign in the yard, list the property in the multiple listing service, and advertise it on social media. During the listing period, the seller sells the home to a co-worker and is not obligated to pay the brokerage any commission. What type of listing did the seller have with the brokerage?
- A. Exclusive right to sell
- B. Exclusive agency
- C. Net listing
- D. Open listing
Answer: B
Explanation:
An exclusive agency listing agreement gives the listing brokerage the exclusive right to market the property, but if the seller personally finds the buyer (e.g., a co-worker), no commission is owed. In contrast, an exclusive right to sell agreement would entitle the brokerage to a commission regardless of who finds the buyer. Therefore, the correct answer is A.
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NEW QUESTION # 44
A buyer submits an offer to purchase a house, giving the listing broker an earnest money deposit to hold. The offer gives the seller four days to respond. The next day, the buyer changes their mind and contacts the listing broker to withdraw the offer and demand the earnest money back. The seller had not even had time to review the offer. Which statement is TRUE?
- A. The buyer can withdraw the offer and get the earnest money back.
- B. The buyer can get the earnest money back only if they make an offer on another property.
- C. The buyer's offer must remain open for another three days.
- D. The buyer can withdraw the offer, but they forfeit the earnest money.
Answer: A
Explanation:
An offer may be withdrawn at any time prior to acceptance and communication of that acceptance. Even if the offer specifies a time frame for response, it does not prevent the buyer from withdrawing it before acceptance.
Since the seller had not accepted the offer, the buyer has the legal right to withdraw and receive their earnest money back. Therefore, the correct answer is C.
NEW QUESTION # 45
When submitting an offer, a buyer handed their broker an earnest money deposit in cash. To comply with the North Carolina Real Estate Commission Rules, what must the broker do?
- A. Ensure the cash is locked in a safe place until the offer is accepted
- B. Deposit the cash into the brokerage trust account within three banking days of receipt
- C. Turn the money over to the listing broker within 24 hours of receipt
- D. Not accept the cash and ask the buyer to write a check instead
Answer: B
Explanation:
Under NCREC rules, a broker must deposit any earnest money received (including cash) into the firm's trust account within three banking days of receipt if the offer has been accepted. If the offer has not yet been accepted, the funds must be safeguarded and then deposited within three banking days following acceptance.
Cash must be treated with particular care, and a detailed receipt should be provided. Therefore, the correct answer is C.
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NEW QUESTION # 46
A buyer's stable monthly income is $6,800. Every month they pay a $485 car payment, $200 in a revolving credit payment, and $1,500 in alimony. Using ratios of 31% and 43%, what is the maximum monthly mortgage payment they would qualify for on an FHA-insured mortgage loan?
- A. $2,108
- B. $1,763
- C. $1,972
- D. $739
Answer: B
Explanation:
FHA mortgage qualification uses two ratios:
Housing ratio (Front-end): 31% of monthly gross income
Total debt ratio (Back-end): 43% of monthly gross income
Step 1: Calculate max housing (front-end)
31% × $6,800 = $2,108
Step 2: Calculate max total debts (back-end)
43% × $6,800 = $2,924
Subtract monthly debts: $485 + $200 + $1,500 = $2,185
Max mortgage payment allowed = $2,924 # $2,185 = $739
The borrower is limited by the back-end ratio, so the maximum housing expense is $739.
Note: The initial selected answer choice "B. $1,763" would exceed the debt ratio when combined with existing monthly obligations. The correct final answer is A.
NEW QUESTION # 47
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